Boeing (BA) CEO Dave Calhoun will step down at the end of the year, the company announced Monday.

Calhoun's departure comes as the plane maker has dealt with a raft of production and quality control issues this year, most notably when one of its 737 MAX 9 planes flown by Alaska Air (ALK) lost a panel in mid-flight back in January.

Last week, Boeing CFO Brian West said the company would see cash outflows of up to $4.5 billion during the current quarter as it works to shore up its production lines.

Boeing stock rose as much as 2.5% following the news. Through Friday's close, the stock had lost more than 27% this year.

The company also announced Monday that Larry Kellner, chairman of its board, will not stand for reelection at the company's upcoming annual shareholders meeting. Steve Mollenkopf, the former CEO of Qualcomm and a Boeing board member since 2020, will replace Kellner and lead the company's search for its next CEO. Boeing also said Stan Deal, currently CEO of its Commercial Airplanes segment, will retire.

In a letter to employees on Monday, Calhoun said the Alaska Air incident "was a watershed moment for Boeing."

"The eyes of the world are on us," Calhoun added, "and I know we will come through this moment a better company, building on all the learnings we accumulated as we worked together to rebuild Boeing over the last number of years."

Calhoun was named Boeing CEO back in January 2020 as the company grappled with repercussions following the crash of two 737 MAX jets — a Lion Air flight in October 2018 and an Ethiopia Airlines flight in March 2019. These crashes together resulted in the death of 346 people.

In his letter, Calhoun said he'd been weighing a decision to step down for "some time."

Calhoun's time at Boeing mired in production issues

Calhoun succeeded Dennis Muilenburg, Boeing's CEO from 2015 to 2019, who was at the helm during the 737 Max crashes and subsequent global grounding of the Max fleet.

Calhoun’s tenure began with Boeing suspending all production of its 737 jets in January 2020. At the time, it was Boeing’s biggest assembly line halt in more than 20 years. Boeing restarted production at a “low rate” in May of that year, and the Federal Aviation Administration (FAA) lifted its grounding order for the 737 Max in November.

A year after Calhoun’s arrival, Boeing and the Department of Justice (DOJ) agreed to pay a $2.5 billion fine to resolve a criminal charge related to conspiracy to defraud the FAA in connection with evaluating Boeing’s 737 Max jet.

Boeing admitted in court documents that it deceived the FAA about the functionality of its maneuvering system, known as MCAS, which allegedly impacted the flight control system of the Boeing 737 Max.

With the settlement behind it, Boeing proceeded to ramp up 737 production and deliveries to get more Max jets in the air.

In the fall of 2023, more production issues with the Max arose, leading to doubt over Boeing’s safety and manufacturing systems. In August, Boeing said that a supplier issue led to improperly drilled holes, and in December, Boeing urged its airline partners to inspect all 737 Max jets for loose hardware in the plane's rudder control systems.

Safety and production issues at Boeing hit a new low following the midair door plug blowout of an Alaska Airlines 737 Max 9 jet on January 5. The fallout from that incident has led to new investigations, additional oversight by the FAA, and the opening of a criminal probe by the DOJ.

Last week at an investor conference, Boeing CFO Brian West said Calhoun’s decision to end the practice of traveled work, in which airline production tasks are done out of sequence, would dramatically improve Boeing’s commitment to safety and better production.

But a new criminal probe, higher cash burn rate in 2024, and another production slowdown for the 737 Max following the Alaska Airlines incident means Calhoun effectively ran out of time, and likely investor patience, to get Boeing back on track.

With additional reporting by Yahoo Finance's Pras Subramanian.

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